Patriot Wealth - August 2021

AUGUST 2021

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PATRIOT WEALTH

What You Need to Know About the SECURE Act 2.0

This past spring, congressional leaders announced new changes that could impact how many Americans plan financially. These proposals could also impact retirement plans in what’s being called the SECURE Act 2.0. You’ll recall the SECURE Act bill was passed in 2019. The SECURE Act restructured the retirement savings process to help an aging population secure their long- term wealth. Under current proposals, which at the time of writing this are not signed into law, a few provisions are designed to modify that act. Rather than ask you to read all 146 pages of the proposals, our team at Patriot Wealth did the digging for you. In our expert opinion, here are the four main takeaways you need to know. 1. Required Minimum Distribution: Currently, as established by the 2019 SECURE Act, required minimum distributions generally must begin by age 72. Prior to January 1, 2020, the age at which required minimum distributions were required to begin was 70½. The legislation would increase the required minimum distribution age once more to 73 beginning in 2022, 74 beginning in 2029, and 75 beginning in 2032.

We know — it’s confusing. But the point to remember is that this minimum age requirement could increase. We will have to pay attention to these age brackets when helping clients plan for retirement. 2. IRS Penalty Statute of Limitations: Right now, the IRS does not have a statute of limitations upon which they can bill you for missing your required distribution. There are proposals set to change that, to where there will be a statute of limitations on when the IRS can do this. In addition, SECURE Act 2.0 as proposed, would reduce the penalty for missed RMD’s from 50% to 25%. 3. Catch-Up Contributions for those over age 50: Per section 106 of the proposed changes, the IRS is finally going to index its contributions for inflation. The last time this was done was in 2006 — we’re due! 4. Plan Contribution Limits: This is where things get a little more complicated. If you’re between the ages of 62–64, your catch-up contribution for traditional 401(k)s or 403Bs is jumping to $10,000. The strange part is that this figure doesn’t apply to those ages 65 and older, despite the fact that many Americans are now working past age 65.

It’s easy to get bogged down by the changes and the confusion that come with proposed bills, but whether or not the proposals become regulation, our team at Patriot Wealth is monitoring your plans and potential changes like a group of hawks. We’re not going to take these lightly. And should these proposals go into effect, we are going to adapt your plans to meet your goals and needs. We are your partner in retirement planning. If you have additional questions, please reach out to our team.

–Wes White

P.S. This is a great time to address a common question we get. Many people wonder if all these changes to retirement planning and regulations will cause the elimination of the Roth IRA. Our belief is that this effective, powerful retirement planning tool will not go away. Both you and the government benefit from this savings plan — that’s an incentive to keep it.

These articles are designed to provide general information on the subjects covered. They are not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Patriot Wealth and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney. Investment Advisory Services is offered through Retirement Wealth Advisors (RWA), a Registered Investment Advisor. Patriot Wealth and RWA are not affiliated. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

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BY GOING BACK TO SCHOOL STAY SHARP AS YOU AGE

show brain function akin to someone 30 years younger. This goes beyond the tired advice to do a crossword puzzle or work a sudoku puzzle every day. The participants in this research study were learning entirely new-to-them subjects, like how to speak a foreign language, use a new piece of technology, or make art. Convinced of the benefits but not sure where to turn to learn? Try these two sources. Most colleges are designed with the traditional, 20-something college student in mind, which may not appeal or be a great fit for adults in their 50s, 60s, and beyond. But many universities are starting to cater to an older crowd with lifelong learning programs. One example is the Osher Lifelong Learning Institute at the University of Washington (UW). UW’s program offers a full

course schedule on subjects in the arts, sciences, and current events taught by qualified faculty and provided at an affordable rate. There are over 100 such programs at universities across the U.S.

While you may be happy for the years of wisdom you’ve gained since being in your 20s and 30s, you might be missing the mental sharpness you once had. Why not have the best of both worlds? Scientists have found that the human brain changes with age — neurons fire more slowly, for example, and short-term memory recall can be more challenging — but that we often underestimate our capacity to continue learning as we grow older. Negative stereotypes about aging can reinforce these beliefs. However, new research is showing that older adults who’ve committed to immersive study of a new subject

Have a longtime dream to write children’s books? UC San Diego

Extension has a certificate program for that! If you’re looking to dive into a single subject or perhaps you’d like to continue working in retirement or shift gears later in your career, certificate programs are a great option. No previous education is required. Most certificate programs are open to all, typically run for less than a year, and easily accommodate part-time learners. Celebrate your years of hard-earned wisdom but commit to keeping your brain young by going back to school this fall.

The Global Microchip Shortage

While the SARS-CoV-2 pandemic stole much of the focus of 2020, along with the first months of 2021, the role that technology plays in everyday life has also captured renewed focus. During the pandemic, technology has enabled everything from virtual meetings, distance learning, robotics, and 5G technology, as well as more file storage, telemedicine, digital payments, and more time with gaming consoles. Technology has been an essential component allowing people to deal with extraordinary conditions and work remotely. At the same time that technology has been relied upon for entertainment and more utilitarian purposes during the pandemic, it remains in an endless evolution, constantly being upgraded with new capabilities in every sphere where it’s found. That has required that the components that make up every new technology must be available and plentiful because a disruption in the supply chain could have dire consequences. This pandemic has proven it has the capability of doing just that. And with global factory production depressed by lock-

down restrictions and social distancing measures, the backlog, despite recent easing, is still being felt by consumers.

Nearly every technology today

relies on semiconductor microchips in one form or another. It is estimated that chips are needed in as many as 169 different industries. There is a global shortage of semiconductor chips and the impact is widespread.

This shortage was born out of work-from-home trends and supply chain disruptions. Another factor has been that only large-scale chip makers have survived the competitive market, and expensive machines used to make chips are often obsolete within five years. That is because consumer electronics are always being upgraded and the market-cycle tends to be fast.

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Dine Out While Dining In 3 Great Patios for Eating Al Fresco!

When it comes to nice weather, you can’t go wrong with Raleigh. June through August tend to be the hottest months of the year, hovering around 90 degrees F, while our winter lows rarely dip below 50. These pleasant temperatures make Raleigh one of the best places to dine alfresco! But how do you choose the best patio when there are so many great options? Well, we believe you can’t go wrong with any spot, but here are some of our favorites. RALEIGH BEER GARDEN Website: TheRaleighBeerGarden.com When: Monday–Friday, 11 a.m. to 2 p.m.; Saturday–Sunday, 10 a.m. to 2 p.m. Where: 614 Glenwood Ave. Whether you stop by the beer garden for pizza or prefer to sample one of its 350 beers on tap — rumor has it this is a World Record as of 2015 — you can’t go wrong with the Raleigh Beer Garden. True to its name, the beer garden’s terrace includes rooftop seating, offering you a bird’s eye view of a great city. But trust us when we say it’s not the view you will love — it’s the selection of beer that’s sure to please everyone in your group. MULINO ITALIAN KITCHEN & BAR Website: MulinoRaleigh.com When: Tuesday–Wednesday, 5–10 p.m.; Thursday–Friday, 5–11 p.m.; Sunday, 4–9 p.m. Where: 309 N. Dawson St. #1313 Consider this a must-visit for date night! From “carefully crafted cocktails” to bold Italian flavors mixed into every dish, you will want to visit Mulino just for the food and drinks alone! But as a bonus to this rich experience, Mulino’s poolside patio is like escaping to a European paradise without ever leaving Raleigh. We believe Mulino is sure to spark a little fun and some romance, too! WHISKEY KITCHEN Website: Whiskey.Kitchen When: Tuesday–Sunday, 11 a.m.–midnight; Monday, 5 p.m.–midnight Where: 201 W. Martin St., Raleigh You don’t have to be a whiskey drinker to enjoy this patio! Whiskey Kitchen focuses on regional flavors and combines that with a love of great tasting whiskey and a fantastic patio to boot. Our friends at Visit Raleigh describe Whiskey Kitchen’s patio as one of the most popular outdoor dining spots in Raleigh. It’s hard to argue when you’re caught up in the excitement of Southern hospitality and local flare!

TAKE A BREAK

Summer Vegetable Greek Salad Inspired by CookieAndKate.com

For the vinaigrette: • 2 tbsp red wine vinegar • 1 tsp Dijon mustard • 1 garlic clove, minced • 1 tsp dried oregano • 1/2 tsp honey • 1/2 tsp salt • 1/4 cup extra- virgin olive oil INGREDIENTS

For the salad: • 1 head romaine lettuce, chopped • 1 cup grape tomatoes, halved • 1 small cucumber, seeded and chopped • 1 cup yellow bell pepper, chopped • 1/4 cup red onion, finely chopped • 1/4 cup fresh parsley, chopped • 1/4 cup Kalamata olives, pitted and halved • 1/2 cup feta cheese, crumbled • Optional protein choices: 1 cup cooked chickpeas or 6 oz Genoa salami

DIRECTIONS

1. In a medium bowl, whisk together vinegar, mustard, garlic, oregano, honey, and salt. Slowly drizzle in the olive oil, whisking until well combined. 2. In a large serving bowl, toss together the romaine lettuce, tomatoes, cucumber, bell pepper, red onion, parsley, olives, and feta (as well as the chickpeas or salami, if desired). 3. If you plan to serve all the salad at once, drizzle the dressing over the salad to lightly coat, then toss to combine. Otherwise, store the vinaigrette and salad separately, then dress each portion before serving.

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INSIDE THIS ISSUE

Your Guide to the SECURE Act 2.0 PAGE 1

Going Back to School Later in Life PAGE 2

The Global Microchip Shortage PAGE 2

Summer Vegetable Greek Salad PAGE 3

3 of Raleigh’s Best Restaurant Patios PAGE 3

5 Reasons to Diversify Your Banking PAGE 4

5 REASONS NOT TO KEEP ALL OF YOUR MONEY IN ONE PLACE IT’S TIME TO DIVERSIFY YOUR BANKING! You’ve probably heard the expression, “Don’t put all of your eggs in one basket.” But what about “Don’t put all of your dollars in one bank”? Banking at a single institution is the default for most people, but just because something is the typical strategy doesn’t mean it’s the best one for you! Here are five reasons to consider taking the road less traveled.

1. Different banks have different perks. Credit unions are member-run nonprofits and often don’t have minimum balance requirements. Traditional banks have cutting-edge financial technology and more loan options. Some banks offer high-yield checking accounts while others don’t, and online banks can have interest rates on savings accounts up to 15 times higher than brick-and- mortars. By banking with more than one institution, you can get the best of both (or three!) worlds. 2. You’ll have a backup if one bank fails. According to Bankrate, 511 U.S. banks failed between 2009 and 2020.

That’s not nothing! If your bank isn’t insured by the Federal Deposit Insurance Corp (FDIC) and it fails, you could lose your entire balance, so diversifying your accounts (or choosing only FDIC-insured banks) is a good backup measure. 3. You can make sure ALL of your money is insured. The FDIC only covers up to $250,000 per depositor, per bank. So, if you have high-value accounts, depositing with multiple banks can ensure all of your money is covered. 4. The more accounts you have, the more withdrawals you can make penalty-free. Many money market

and savings accounts have limits on how many times you can pull money out each month. If you bank with several institutions, you can make a few withdrawals from each of them, stay under the limits, and avoid fees. 5. You’ll have access to more banks and ATMs. Do you travel across your city, state, or the country regularly? If you do, it can be beneficial to bank with several institutions so you’re always close to an ATM or bank branch. For example, you may want to use a local credit union at home for the member benefits but bank with a national bank for out-of-state emergencies.

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